Pace of Growth in Office-Using Payrolls Slows

August’s total payroll gain of +142,000 was somewhat lackluster, particularly in the context of market expectations for a +230,000 rise and monthly employment increases over the prior 12 months that have averaged +212,000. Even so, gains in office-using employment (+51,000 in July) were roughly in line with the average +55,000 increase observed over the last year (Table 1 and Chart 1 below). Gains in office-using employment stemmed almost entirely from an increase in professional/business services workers (+47,000), with temporary help services employees (+13,000) contributing more than a quarter of the total change. The increase in professional/business services employment for June and July was revised down by a cumulative -14,000, however, eroding some of the employment gains of the past few months.

The unemployment rate continued to hover at its 6-year low (the rate fell from 6.2% in July to 6.1% in August), and wage gains on an annual basis—both the percentage change in average hourly and average weekly earnings—each rose at a 2.1% pace versus a 2% gain in consumer price inflation for the 12 months ending in July. While the number of unemployed workers has continued to decline (Chart 2 below) an equal number has been leaving the labor force—thereby removing themselves from the count of the unemployed entirely. One area that merits further investigation: the rise in the fraction of younger people (aged 16-64) identified as “disabled” and the increased propensity for these workers to remove themselves from the labor force. Whether or not disability benefits have drawn workers out of the workforce is debatable, but since 2008 (when data began to be tracked), the fraction of the aged 16- 64 population identifying as disabled has climbed to a record high. Moreover, the labor force participation rate for young disabled workers has dropped by five percentage points over this period.